Chipmaker AMD to cut workforce by 15 percent after weak 3Q

Chipmaker AMD continues to struggle in the wake of a global downturn in PC sales, with the company on Thursday announcing further restructuring plans.

These are evidently troubled times for PC chipmaker Advanced Micro Devices (AMD). With revenue down in the its third quarter, and the outlook for the fourth equally grim, the Sunnyvale, California company has announced a second round of restructuring slated for the coming months that will see its workforce of 12,000 slashed by 15 percent.

Job cuts, site consolidations and other measures will see the world’s second biggest chipmaker make operational savings of some $190 million, Reuters reported on Thursday.

The chipmaker has been struggling for a number of reasons – PC sales have slumped due to a sluggish world economy where people are spending less, while those that do have the buy money for electronics are turning in ever greater numbers to tablet computers and smartphones, an area AMD has up to now failed to exploit. AMD has also been losing market share to the world’s leading chipmaker, Intel.

“The trends we knew would re-shape the industry are happening at a much faster pace than we anticipated,” AMD CEO Rory Read told analysts during a conference call following the release of the third quarter figures.

Read joined AMD in August last year and quickly set to work trying to turn the company around, saving $200 million in operating costs by shedding 10 percent of the workforce. But as this week’s news indicates, the chipmaker still has a mountain to climb to get the company back in shape.

One way would be to build an effective strategy for mobile, and quick. With PC sales not expected to see any significant growth in the coming years, and the tablet market booming, there seems only one way to go. This month AMD made a positive move with the launch of its Z-60 chip for Windows 8 tablets. With a slew of tablets running Microsoft’s new operating system expected to launch in the coming months, this is a great opportunity for AMD, although with Intel going for the same market, it’s going to be no walk in the park for the struggling chip maker.

Source : http://www.digitaltrends.com/mobile/chipmaker-amd-announces-layoffs-as-pc-sales-stumble/

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Texas Instruments backing away from mobile business

Future Kindle Fires likely to be impacted by TI change of direction

Despite the explosive growth of wireless mobile devices, particularly smartphones and tablets, at least one longtime chipmaker looks to be shying away from that market.

Reuters reported that Dallas-based chipmaker Texas Instruments has started to expand its business beyond investments in mobile wireless, which currently includes powering Amazon's Kindle Fire tablet.

Amazon's latest Kindle Fire, the Kindle Fire HD, sports a TI OMAP 4470 processor.

In a webcast meeting with investors, Greg Delagi, TI's senior vice president for embedded processing, painted mobile as "less attractive" for the company moving forward, which analysts view as the beginning of the end of the company's smartphone and tablet ambitions.

Investor reaction

"TI made it very clear they no longer want to be in the business of proving application processors for smartphones or tablets," remarked Longbow Research analyst JoAnne Feeney to Reuters. "What remains uncertain is for how long they'll support customers."

For the time being, TI promises to continue supporting mobile application chip customers, but won't invest as heavily into its future roadmaps where tablets and smartphones are concerned.

Texas Instruments plans to instead focus its efforts on industrial clients, such as auto makers, where the company sees future growth for its embedded chip business.

Judging from the company's stock, the announcement on Tuesday made investors nervous, with a three percent decline over worries that TI's new direction would adversely affect their bottom line.

Source : http://www.techradar.com/news/phone-and-communications/mobile-phones/texas-instruments-backing-away-from-mobile-business-1099999

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New Intel chips coming as sales outlook takes a hit

Can the chipmaker turn things around with new processors?

Intel is one of the top chipmakers in the world, but according to analysts' predictions and the Santa Clara, Calif. company's own financial outlook, things are not looking up in the PC business.

Reuters reports that at least eight analysts have shared bad tidings for Intel, with poor economies in major markets (Europe, the US and China) and increasing demand for mobile devices (versus desktops/laptops) to blame.

A report from Gartner in July claimed that PC sales had fallen flat for the seventh quarter in a row during the second half of 2012.

And another analyst, Citigroup's Glen Yeung, told CNBC on Friday that "the worst third quarter in the history of PCs" is right around the corner.

"I would point out that this is the first time ever that Microsoft has changed operating systems, and it's not just PCs," Yeung said. "This time, there's a tablet involved, there's a smartphone involved."

Intel's negative outlook

Intel's lowered its own third-quarter revenue estimate, citing "weaker than expected demand in a challenging macroeconomic environment."

Intel rolled back its estimates by a full eight percent, a figure Reuters claims is "much more severe than expected."

And Intel's shares have fallen 11 percent since the end of April.

Blame poor economies all you want, but the fact is that Intel has fallen behind in the processor arms race, losing ground to chipmakers like Qualcomm in the mobile arena.

With forecasts so low, what can Intel do to bolster its fortunes?

Lean on Microsoft

Intel is looking forward to Microsoft's impending Windows 8 launch with hope in its heart and dollar signs where its eyes should be.

Intel's Ivy Bridge chip successor "Haswell" is expected to be introduced for the 2013 holiday season, and as TechRadar has pointed out in the past, Haswell chips are estimated to consume half the power of current processors.

That makes them a huge draw for energy-conscious customers and those craving better battery life.

Meanwhile, Intel's current Ivy Bridge architecture will power Windows 8 PCs in the fall.

Any number of those factors could combine to sell some PCs in the next year or so. In fact, Intel's counting on it.

Source : http://www.techradar.com/news/computing-components/processors/new-intel-chips-coming-as-sales-outlook-takes-a-hit-1095633

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